BEAUMONT - All the talk about takeovers, bailouts and government intervention plaguing the American banking industry is having a positive effect on the local credit union industry, area credit union executives said this week.

With all the problems concerning banking institutions, credit unions are seeing a rise in questions and concerns from its members, an increase in membership and more importantly, assets.

"People think that in order to be a credit union member, you must be a part of a group or organization. You can be a member as long as you work, live or worship in the community where the credit union is at."

Baione, whose credit union has 25,000 members, said the biggest concern she's faced from members during the financial crisis has been about insurance and safety regarding accounts.

Smith said because of the way credit unions are structured they do not pay federal taxes but banks pay 34 percent taxes.

He also said that banks face stiffer regulations from the FDIC than credit unions face from the NCUA.

"The NCUA is part regulator, part association and part cheerleader for their industry," Smith said.

"Their regulations are not near as thorough or complete like the ones that are applied to banks."

Smith continued by saying because credit unions have fewer regulations, some of them are taking on tasks such as commercial lending, which reminds him of the savings and loan crisis of the 1980s and 1990s.

Ron Burkhalter, president and CEO of Gulf Credit Union, said that because credit unions are owned by members, it allows them to invest in different things than a bank would.

Some of those items a credit union would not invest in are sub-prime mortgages or selling off mortgages to another financial institution.

"I think the misconception is when people hear about the credit crisis and they think that applies to the credit unions. We can borrow from the Federal Reserve Bank or the Federal Home Bank, but most credit unions don't," he said.

"A lot of these investment banks were living off lines of credit with other banks. They leveraged with other banks and did not have any capital. When all these payments came through, they did not have the money to pay bond holders and creditors. Credit unions are well-regulated and well-capitalized."

Burkhalter said its because of those pitfalls, credit unions are required to keep reserve capital.

Reserve capital, as he described it, is almost like a rainy-day fund that a credit union cannot touch.

He has also reminded his members that they are not banks and that the regulations are different, which is one of the reasons credit unions are doing better than what most might expect.

"Our members are the owners. A member that pays that $25 fee has equal access just like someone who has $200,000 with us," said Burkhalter, whose credit union has 30,000 members. "You know who are lending to. Even though the economy is bad, people will pay their notes to the credit union first because they do not want to go back on their word."